ALBANY — A Saratoga Springs lawyer signed a false document during the $1 million sale of a Washington County paper mill in 2005, hiding its status as a Superfund environmental cleanup site, the former owner of the property testified Monday.

The attorney, John M. Hogan, 77, went on trial Monday in U.S. District Court. He's charged with three counts of wire fraud for his alleged role in duping the buyers to purchase the Middle Falls paper mill without them knowing it was being treated by the U.S. Environmental Protection Agency for hazardous substances.

Federal prosecutors in Albany say Hogan and his client, the Los Angeles-based St. Regis Investment Group, which owned the mill, started trying to sell the property two days after being informed by the EPA of the environmental hazards. Hogan later represented the seller and the buyer, United Fibers, during the closing in Los Angeles on Oct. 11, 2005.

Khobian testified Monday, following opening statements, before Chief U.S. District Court Judge Gary Sharpe. Assistant U.S. Attorney Michael Olmsted questioned Khobian about a letter his company had sent to Thio. It stated: "We hereby acknowledge that to my knowledge there are no pebs (sic), asbestos, or underground storage tanks are located on the premises. We further acknowledge that we are not under investigation, administrative order, consent order and agreement, litigation or settlement with respect to the property being sold to the United Fabrics."

The prosecutor asked Khobian, "Is that statement true or is it false?"

"This is false," Khobian testified.

"Who wrote that statement?" Olmsted asked.

"John Hogan," Khobian replied.

A trial brief filed by the government stated that Hogan drew up the letter and had it notarized. The brief stated that in 2005, when a representative of United Fibers toured the site, Khobian arranged to have the EPA and its contractors away that day.

After the closing, the brief stated, Hogan informed Thio that the EPA was visiting the site and he would find out "what he is up to." Then in June 2006, Hogan allegedly sent an email to United Fibers stating there was a liability of $325,000 on the property but that an EPA official, Paul Kahn, had told him "that the EPA often settles these matters with the responsible owner for about 20 cents on the dollar."

On Monday, the prosecution displayed a Nov. 6, 2007, letter to Khobian from Thio, who at that point had spoken to the EPA and become aware of the hazardous substances on her property.

"I feel that a severe act of fraud has been committed against me," Thio wrote. "It has been disclosed to me that the paper mill site was a Superfund site that had impending, necessary and expensive cleanup, which violates both New York and California real estate law ... this whole situation has caused countless distress for me financially and emotionally."

The letter added, "I would like to speak directly with you regarding this rather than going through another middleman."

The prosecution contends that as the attorney for Thio and United Fibers, Hogan owed his clients knowledge about the problems with the paper mill.

The EPA work to clean up the mill ended in May 2006 at a cost of $340,000, prosecutors said.

Hogan is being represented by attorney William Dreyer. In his brief, he argued, among other points, that Thio was the buyer in name only and the transaction was handled by her uncle and father. Dreyer contends her uncle, Hermanto Sentoso, was United Fibers' primary negotiator for the sale — and knew of the EPA issue.

More than three years ago, Hogan came under FBI scrutiny in connection with his business dealings with members of a Saratoga family who were convicted in an investment and mortgage fraud scheme in which investors lost millions of dollars. One defendant, Ronald Persaud, received more than 15 years in federal prison; his ex-wife, Esther, got five years in prison; and their son Shawn received an 18-month prison sentence.

Three attorneys used by the Persauds, including Hogan, testified at their trial. Hogan, who was not charged in that case, was listed as a board member of a fictitious bank chartered by the Persauds in Sweden.